UK house price growth continues in first month of 2016

halifax-logoHouse prices in the UK increased by 2.2% in the last three months compared with the previous quarter taking the average value to £212,430.

The January index data from lender the Halifax also shows that prices were up 9.7% year on year and up 1.7% in compared with December 2015.

Martin Ellis, Halifax housing economist, pointed out that the quarterly rate of change increased following two successive months below 2% and the annual rate has been in a narrow range between 8% and 10% for nearly the whole period since the start of 2015.

‘The imbalance between supply and demand continues to exert significant upward pressure on house prices. This situation looks set to persist over the coming months. Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease,’ he said.

He also pointed out confidence in the housing market remains strong, according to the latest quarterly Halifax Housing Market Confidence Tracker.  Despite declining steadily since last May, house price optimism in the final quarter of 2015 continued to show that a majority of people believe that average UK property prices will be higher 12 months from now.

Price growth is largely due to a lack of supply, according to Randeesh Sandhu, chief executive officer of residential development finance provider Urban Exposure. He also pointed out that there could be an increase in activity before the new second home stamp duty tax increases in April.

He said that the lack of supply continues to be constrained by developers having a lack of access to finance as well as a shortage of key materials and a skilled workforce. ‘Far more needs to be done to boost development, particularly in London where average house prices in over half of London neighbourhoods are now £500,000 or more,’ he added.

Rob Weaver, director of Investments at property crowdfunding platform Property Partner, also believes that supply is the main driver in the housing markets. He also explained that while sales in central London have dropped off the outer boroughs are seeing increased activity.

‘Potential buyers are hunting for more affordable housing, attracted by regeneration in places like Thamesmead and Woolwich, and of course, Crossrail. We’re also seeing a spike in activity in the market as buy to let landlords rush to seal deals before the stamp duty 3% hike in April,’ he explained.

‘After that it is less clear as the spectre of cuts in mortgage tax relief looms next year. But wage growth is just not keeping pace with house prices, and that raises the serious question of affordability. Demand may start to drop leading to a softening of prices. An eventual interest rate rise, possibly at the end of the year, may also lead to a correction in the market,’ he added.

Jonathan Hopper, managing director of buying agents Garrington Property Finders, pointed out that the buy to let rush will push demand higher in the next couple of months but it is short supply that is affecting the underlying market.

‘Britain simply can’t build homes fast enough to keep up with demand. With demand likely to be boosted even further by the Bank of England’s admission that an interest rate rise could remain firmly off the table for the rest of the year, 2016’s strong start is unlikely to be a blip,’ he added.

Further house price growth throughout 2016 is almost inevitable, according to Mark Posniak, managing director at Dragonfly Property Finance. ‘With interest rates unlikely to move for some time, and people generally confident about their jobs and the economy, demand is also very strong. People’s fear of being priced out of the market is tangible at present. This is especially the case in London and the South East,’ he said.

‘While logic suggests house price growth will ease as affordability issues increase, our relationship with the property market is nothing if not emotive. Prices rise in this way only adds to demand and so the growth continues,’ he added.

Source: Property Wire


9.5% price rise in 2015 takes average home to over £208,000 says Halifax

halifax-logoPrices in the three months to the end of 2015 were 9.5 per cent higher than in the same three month period a year earlier – and the average price of a UK home is now £208,286 according to the Halifax index.

“There remains a substantial gap between demand and supply with the latest figures showing a further decline in the number of properties available for sale. This situation is unlikely to change significantly in the short-term, resulting in continuing upward pressure on prices” says Halifax housing economist Martin Ellis.

Homes are also becoming less affordable, as the house price to earnings ratio rose to 5.58 in December from 5.49 in November and 5.10 at the end of 2014, taking it to its highest level since January 2008, according to the data.

However, price growth in the final quarter of last year was slightly lower than in the preceding three months.

Source: Estate Agent Today

Price of flats rising faster than houses, says Halifax

halifax-logoOver the last decade the price of flats has risen much faster than the price of houses, according to research for the Halifax.

While flats have risen by 60% in value over that time period, the average house has only gone up by 34%, it said. Detached homes have seen the smallest price rise, at 21%.

At the same time the Halifax said the rise in UK house prices in the year to September slowed to 8.6%, from 9% previously. Between July and September, prices went up by 2% compared with the previous quarter.

On a monthly basis, the Halifax said prices in September dropped by 0.9% compared with August. As a result the value of the average house or flat in the UK has fallen to £202,859.


Last week, rival lender Nationwide said that house prices rose by just 3.8% in the year to September. It also said that the gap between prices in London and the rest of the UK had reached a record high.

The relative popularity of flats has fallen over the past decade, according to the Halifax research. In 2005, 20% of all property sales were flats. Ten years on, that figure has fallen to 17%. Price rises have therefore been driven by flats in the capital.

“The national increase in flat prices has been led by London where flats account for roughly one in two property sales; substantially higher than for the country as a whole,” said Martin Ellis, Halifax’s chief economist.

Source: BBC News

Flat prices rise 60% over the last decade

Research from the Halifax has revealed that the average price of a flat has risen £730 per month over the past decade from £145,874 in 2005 to £233,424 today.

The 60% increase in the average price of a flat is significantly higher than the 38% rise for all residential properties over the same period. However, a big proportion of the national rise in flat prices since 2005 is due to the rapid increase in flat prices in London (67%), where flats represent a relatively high proportion of the overall property market (49% of sales compared with the UK average of 17%).

Detached homes (21%) and bungalows (28%) have recorded the smallest rises over the last ten years.

Regional variations

A typical flat currently costs less than £120,000 in the North, East Midlands, Wales and Yorkshire and the Humber, and between £120,000 and £145,000 in the North West, West Midlands, Scotland and East Anglia. At £370,281, a typical London flat is considerably more expensive than flats anywhere else in the UK.

While flats have been the best performing property type over the past decade in Greater London, Scotland and the South West, there are regional differences.

Semi-detached properties have risen most in value in the South East, East Anglia and the East Midlands, whereas terraced homes have been the best performing property type in five of the 11 regions (North, North West, Yorkshire and the Humber, West Midlands and Wales).

The average price of a terraced home is between £119,000 and £143,000 in all regions outside southern England.

Source: Property Reporter

House price growth confidence hit new high in UK after general election

Boards smlConfidence in the outlook for house price growth in the UK hit its highest level in four years following the general election in May, but dropped back last month.

The dip in confidence in June comes despite continued rise in real wage growth, together with record low numbers of homes available for sale pushing average house prices over £200,000 for the first time ever, according to the Housing Market Confidence Tracker report from the Halifax.

House Price Optimism (HPO) hit +68 in May 2015, and although it slipped back slightly in June to +64 it remains substantially higher than at the beginning of the year when it was +52 in the January survey.

Nevertheless, while the May high was short lived, the percentage of Britons predicting an increase in the average property price of more than 5% over the next 12 months has still risen from 34% to 38% in the last quarter, comparing the March and June 2015 measures, respectively.

This increased optimism also corresponds with a fall in the net figure for buying sentiment from +35 in February 2015 to +25 in June 2015. Some 56% said in June they think it will be a good time to buy property over the next 12 months, compared to 61% who said this in February 2015. At the same time there’s been an increase in the net figure for selling sentiment from +27 in February 2015 to +32 in June 2015.

With the Governor of the Bank of England saying improving economic figures means an interest rate rise has moved closer, 48% expect mortgage interest rates to be higher in 12 months’ time compared to 45% in the first quarter of the year.

Londoners are less likely than those in any other region to say it is a good time to buy at 38% compared with 56% of Britons overall, making it the only region where the proportion who think the next 12 months will be a bad time to buy exceeds the proportion who think it will be a good time.

Those in the South East are more confident than in any other region that house prices will be higher in 12 months’ time at 90% compared to 69% of Britons overall, with those in the North East and the West Midlands the least likely to say this, both at 59%.

‘Economic growth, together with increasing real earnings growth and historic low mortgage rates are all supporting the continued rise in house price optimism. It’s not been a smooth increase though as while there was a noticeable spike in optimism straight after the General Election result, this has now fallen off slightly,’ said Martin Ellis, housing economist at the Halifax.

‘A key factor in maintaining optimism over house price growth has been the fact that the stock of homes available for sale is currently at record low levels. If this growth is to be sustainable then we need to see a comprehensive house building plan rolled out across the UK, and soon,’ he added.

The research also shows that raising a deposit is still seen as one of the main barriers to home ownership with 55% mentioning this, followed by 47% saying it is job security and for 35% it is rising property prices.

While concerns over raising a deposit have fallen in the last quarter, cited by 61% of Britons as a being a barrier to buying, this is still higher than the proportion who said this in the first quarter of 2011 when it was 50%.

At the same time concerns about rising prices have continued to increase, with 35% citing this as a barrier to buying compared to just 15% in 2011.

Source: Property Wire

Steady rise in UK house prices – Halifax

halifax-logoHouse prices continue to rise steadily, according to the latest Halifax House Price Index.

Martin Ellis, housing economist, said: “Prices in the three months to June were 2.1% higher than in the previous quarter, edging above the 1-2% range recorded throughout the first five months of the year. The annual rate is at its highest for nearly three years with prices in the three months to June 3.7% higher than in the same three months last year.

“Activity has also improved in recent months. Both home sales and mortgage approvals for house purchase – a leading indicator of sales – increased in May.

“Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices. The Funding for Lending Scheme is also likely to be boosting the market by helping to reduce mortgage rates.

“There are also early indications that the Help to Buy: equity loan scheme may be stimulating demand. Despite these signs of improvement in the market, the still subdued economic background and weak income growth are expected to remain significant constraints on housing demand and activity during the second half of 2013.”

Key facts House prices in the second quarter of 2013 (April-June) were 2.1% higher than in the first quarter of the year (January-March).

As a result, house price growth between the latest three months and the preceding three months edged above the 1-2% range that it had been in throughout the preceding five months. This was the biggest increase on this measure since January 2010 (2.9%). Prices in the three months to June were 3.7% higher than in the same three months a year earlier. This was the biggest increase in this annual measure since August 2010 (4.6%). House prices increased by 0.6% in June. This was the fifth consecutive monthly rise.

Activity is also picking up. The number of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 7% between April and May to 58,200; the highest monthly level since December 2009. Approvals in the three months to May were 2% higher than in the previous three months.

Source: Halifax


Strongest annual UK house price rise since 2010

halifax-logoResidential property prices in the UK appreciated by 0.4% in May, as more buyers piled into the market, fuelled by improving conditions and government schemes such as Help to Buy, according to Halifax.

“House prices continue to pick up gradually,” said Martin Ellis, Halifax housing economist.

For the three months to May, UK home prices rose by 2.6% compared to the same period last year – the biggest rise since September 2010.

Ellis added: “Market activity has also improved slightly in recent months although home sales remain low by historical standards. Despite these recent signs of improvement in the housing market, the subdued economic background and the accompanying weak income growth continue to be a significant constraint on housing demand and activity.”

Moving forward, many property commentators expect to see property prices rise further, supported by Help to Buy.

The scheme currently allows buyers to acquire a new build property up to the value of £600,000 with a minimum 5% deposit. The initiative will be opened up to resale homes next January, potentially helping to push property prices higher in the process.

But there are fears among some that this could lead to a housing bubble.

A report issued by the International Monetary Fund (IMF) two weeks ago stated: “This measure (Help to Buy) may temporarily help boost confidence in the housing market, but there is a risk that, in the absence of an adequate [housing] supply response, the result would ultimately be mostly house price increases that would work against the aim of boosting access to housing.”


Positive signs for UK housing market – Halifax

halifax-logoHouse prices in the last quarter were 1.9% higher than in the previous three months, according to the latest Halifax House Price Index.

Martin Ellis, housing economist, said: “The signs of improvement in the housing market towards the end of last year continued in January.

“Prices in the three months to January were 1.9% higher than in the previous three months; the strongest figure in this measure of the underlying trend for three years. Prices were also 1.3% higher than in the same period a year ago, marking the first annual rise for 27 months.

“Market activity has also improved with sales in 2012 at their highest for five years. Rising mortgage approval numbers point to further increases in home sales in the coming months.

“The Funding for Lending scheme has helped lenders to lower interest rates and improve availability in the past few months. This is likely to have been a factor contributing to the pick-up in both home sales and prices.

“The outlook for the UK economy and house prices, however, is more unclear than usual. Subdued economic growth and pressures on household finances are expected to constrain housing demand. Overall, we expect continuing broad stability in house prices nationally in 2013.”


UK property price growth in 2012 hit three-year high

Despite a slowdown in the UK housing market in the final quarter of 2012, residential property prices still ended the year up 3.4%.

This was due to strong growth in the opening six months of the year, according to Assetz House Price Watch, an analysis of house price data from ONS, LSL Acadametrics, Halifax, Nationwide and Rightmove, which claims to give a comprehensive overview of the UK property market.

The data, which Assetz claim offers a more accurate picture of house price trends, shows that the average price of a home is now £202,824, an increase of £6,634 since December 2011.

The annualised average rate of growth for December was -8.6% while the three, six and 12 month annualised rates of growth are -1.4%, -3.4% and 3.4% respectively.

Stuart Law, chief executive of Assetz, said: “In spite of some downbeat forecasts, 2012 saw the strongest calendar price growth for three years, comfortably achieving our predicted 3%. Following a healthy first six months, there was an inevitable price correction in the second half.

“The UK housing market in 2012 was buoyed by an influx of buy-to-let investors from home and abroad which has increased competition for the best properties in areas where there is strong employment prospects, transport connections and amenities. For this reason, the market remains two tiered with London and the commuter heartlands of the South East and regional cities such as Manchester, Leeds and Liverpool seeing stronger prices rises than elsewhere in the UK.”

With the base rate set to enter a fifth year at its historic low of 0.5%, Mr Law believes that more people will divert capital from low interest savings accounts to high yield property investments. This coupled with the greater availability of mortgage finance as part of the Funding for Lending Scheme (FLS) will support growth.

He added: “We are confident of price growth of as much as 5% this year which would leave prices just shy of the 2007 peak in nominal terms and their highest since February 2008. The property market is well advanced on its slow road to recovery.”


UK housing market set to improve

More Britons expect house prices to rise than fall over the coming 12 months, according to the latest Halifax Housing Market Confidence tracker.

Just over a third (35%) of respondents forecast that the average UK house price will rise over the next year, while a fifth of respondents (20%) predict a decline in prices over the same period.

This means that the headline House Price Outlook balance (i.e. the difference between the proportion of people that expect house prices to rise rather than fall) stood at +15 in October. Although the headline House Price Outlook balance is unchanged from the reading in June, confidence in house price prospects is significantly stronger than it was at the beginning of the year -the House Price Outlook is just over double the +7 recorded in January. It is also significantly stronger than the -2 of October 2011.

However, the outlook for the housing market remains subdued. The majority think that any house price change over the next 12 months will be relatively small with two-thirds (66%) expecting any movement to be between +5% and -5%. The average UK house price in September 2012 was 0.3% lower than in December 2011, according to the latest Halifax House Price Index.

Martin Ellis, housing economist at Halifax, said: “Despite some regional differences, the general improvement in confidence in the outlook for house prices over the past year reflects the relative resilience of the UK housing market. Although the weak economic climate remains a significant constraint on housing demand, the low level of mortgage payments relative to income continues to provide support for house prices. We expect house prices to be broadly unchanged over the rest of this year and into 2013.”

More than half the respondents highlighted the challenges in raising a deposit (58%) and concerns about job security (51%) as the main barriers to buying a home. Respondents also picked out household finances (32%) and the general availability of mortgages (31%) as major hurdles to home buying.

The north-south divide regarding the outlook for national house prices over the next 12 months has widened. The average headline House Price Outlook balance (i.e. indicating whether more people expect house prices to rise rather than fall) across the regions in the south of the UK1 stood at +17 in October 2012, more than double (105%) the average headline House Price Outlook balance for the north of the Great Britain (+8). This is nearly five times the divide in January’s survey when the average headline House Price Outlook balance for the south of the country1 (+8) was just over a fifth (22%) higher than average headline House Price Outlook balance for Northern Great Britain (+6).

Those living in the South West are the most optimistic with an overall net balance of +19%, closely followed by those living in London (+17%) In contrast, those living in Scotland and the East Midland are the most pessimistic about the outlook for house prices (both +4%).

More than half (56%) of respondents in the  north of Great Britain indicated worries over job security as a major barrier home buying, greater than the average proportion in the South (48%)

More than half the respondents (56%) think that it will be a good time to buy in the next 12 months. This is over five times the proportion of Britons that feel it will be a good time to sell (11%). Overall, less than a tenth of those questioned (9%) were positive about both buying and selling over the next year, suggesting that the level of housing market activity is likely to remain subdued.

Source: Investor Today